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Investigating Congress

Investigating Congress

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Published by Lachlan Markay
A primer from the Center for Responsive Politics on investigating the personal finances of members of Congress.
A primer from the Center for Responsive Politics on investigating the personal finances of members of Congress.

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Published by: Lachlan Markay on Apr 22, 2012
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Tips from the Center for Responsive Politics / Open$ecrets.org

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About .theReporting Requirements
Members of Congress, candidates for federal office, senior congressional staff, nominees for . executive branch positions,Cab;net members, the president and vice president and Supreme Court justices are required by.the Ethics in Government Act of1978 to file annual reports disclosing their personal finances. Compliance and enforcement of this requirement is overseen by the congressional ethics committees, the ethics offices of government agencies and, in the . case of executive branch officials, the U,S. Office of Government Ethics. These forms record earned and unearned income, assets and related transactions, liabilitie.s, contributions made in lieu of honor aria , gifts received,non-governmental positionshElld, travel that was paid lor or for wh lch the Jilerwas reimbursed,andvariousa.greements into Which the filer has entered. Information relating to the spouse and dependent children of the filer is also reported in many cases. The following outlines the major types of information that. must be reported on personal financial disclosures: INCOME • Sources and amounts of outside, ElarnedincomeElxceeding $200 must be.reported.The officials'. government salaries are not typically reported on their disclosures,buttheyare public record. The source, but not the amount, of a spouse's income over $1,000 must also be reported. Electedofficials.andseniofl)taffarelimitedinlheamountofoutpide.income they may earn while serving. ($24,315 in 2005) Exceptions are made for income that is previously approved and for.certainbook royalties andadvaOces.

• •


Q •.

Elected officials and senior staff are prohibited from receiving honoraria for speeches, '~~~c~~:do;oag~:r~~~Flces.However, in lieu of honoraria, they may allow the amount to be ,Only the source and amount of these honoraria are reported to the general public here. The organization receiving payment is reported confidentially to the congressional ethics committees.

ASSETS • Assets held forinvestmentor the production of income that were worth more than $1,000 at the end of the calendar year, must be rep()rted in this section of the report. This includes securities, real estate (excluding thefiler'sprimaryresi.dence, unless it generates income), ownershipofa business,. bank aGcountsand.Joans owedtothefiler. Assets held within any self-directed account orfundshculdbetlsted individually ..Filers are notrequired to provide.cletailon theindividualholdingsof,forexample, mutual funds. The value of these assets. and the type and amount of income they produced are listed. Assets that produced more than $200 of income during theyear should be listed regardless of their value at the close of the year.



Center for ~ Responsive Politics




TRANSACTIONS . •. Purchases, sales.and exchanges of assets that amount to more than $1,000 in the calendar year are reported along with the date and the amount transacted.


Any liability or loan where the filer, their spouse or their dependent children owed more than $10,000 at any time during the calendar year must be reported. Li~bility listings disclose the creditor, the type of HabilitY~lld the greatest amount owed during the reporting period. Excluded are loans secured by personal property that does not produce income, such as mortgages on the filer's principal residence or automobile.

POSITIONS • Filers must disclose positions they hold with non-governmental org~nizations, excluding religious, social, fraternal or political organizations. Positions of a purely honorary nature and those held by Spouses and dependent children are also excluded.

AGREEMENTS • Filers must disclose ~greelTl~ntswith.formeremployersdescribing, for instance, conditions for re-employment,severance payments, buyout agreements or profit-sharing plans. Book deals are frequently listed here.


Travel and travel-related reimbursements from a single source, valued at more than $305 in aggregate for the year and connected to official business, are reported with information on the source, dates, purpose of the travel and itinerary. The requirement to file travel information here is in addition to more specific travel disclosure available here. on OpenSecrets.org.

GIFTS • • Some gifts are acceptable: those from personal acquaintances, contributions to legal defense funds and commemorative items. The source, value and a description of gifts that exceed $305 from a single source, other than a relative, are listed in this section. Giftsworth $122 or.less need not be counted toward the $305 threshold.

SOURCE: Center for Responsive Politics, April 2008

Center for" ~ Responsive Politics

p. 3

About Personal Fif1ances Data & C.RP's Methodology
Officials file their forms-e-on paper, never electronically-by May 15 each year, covering the prior calendar year. Congressional forms are released to the public 30 days later.


House. Legislative Resource Center
B-106 Cannon House Office Building Washington DC, 20515-6612 Phone: (202) 226-5200 Office Hours: 9 AM - 6 PM

Secretary of the Senate
Office of Public Records 232 Hart Senate Office Building Washington,DC 20.510 Phone: (202) 224-075a Note: CRP does not collect personal financial data for non-incumbent there are simply too many. PRESIDENT & EXECUTIVEBRANCH candidates forCongress;

US Office of Government Ethics
Denise M. Shelton Ethics Assistant Financial Disclosure Division 1201 New '{ork Avenue,N.VV., Suite 500 Washington,D,C. 200Q5-3~17 Phone:202-482-~276; .(202) 208..,8000, Ext ..1139 Fax: (202) 20a-8038 or208..,8Q39 PRESIDENTIAL CANDIDA TES (excluding incumbentj

, Federal Election Commission's Public Records Office
999 E Street, NW Washill!;Jton, DC 20463 Phone: (800) 424-9530 (press 2 when prompted)

Personal Financial Disclosures Database
http://www.opensecrets.org/pfds/overview.asp . This searchable. database currently contains data for 2004 and later. Mew data covering the . preceding year is incorporated in early fall. Scanned images for reports dating to fhfj1990s can be found by searching here: http://www.opensecrets.org/pfds/

Center for !",:a~ Responsive Politics

p. 4

After electronically scanning the paper reports into digital images, the information is captured via data entrYClnd verified.

Some.ftteesattachaccount statements

or other additional material as a supplement or replacement for the standard forms. When new or more detailed information is available in these attachments, it is entered CIS well.

, Once the database is populated,lhe names. of assets.Ilablllties and transactions, as well as sources of income, gifts, travel reimbursements, outside positions and agreements, are standardized and, when appropriate, categorized according to industry. ' Assets .arealsocodedaccorqingtQ type .0f.investment,aIlOWingthemtobe Identified, where possible; as stocks, bonds, mutual funcls, etc. When an industry code wasnot appropriate, as with diversified mutual funds and items such as cash accounts, those figures are excluded from industry profiles,

Net worth is calculated by summing the filer's assets and then subtracting any listed liabilities. , Filers report th~amountofea~botthejrassets, transacti()ns and liabilities as falling within one of several ranges. The top range of "Over $50 miHion"limits valuation ·of very large assets. When further research definitively reveals a more accurate figure, CRP uses it in place of the range. Th.erninimumpOSsiblE;l\faluE;ls for eachas.setareadqed together as are the maximum possible values.Ltkewise, minimurn.and maximum liability amounts aresummed. The maximum debt figure was then subtracted from the minimum assetfigure and the minimum debt figure was subtracted from the maximum assetfigure. The midpoint or average of the two limits was also calculated andusedforpurPOse13ofranking the filers bywealth. Using the average for these rankingsavoids much of the.distQrtioncaused when a filer is highly leveraged. Due tothe various . ranges reported on the forms, filers with high liability totals as well as high.assettotals could find themselves deep in the red and ranked accordingly low if the minimum possible net worth is used despite the fact that they are Widely regarded as one of the wealthiest members of Congress. All three figures are 'displayed for reference, but tile useof.the average paints a picture that much more accurately reflects reality.

The ethics law does not require fiiers to report property or liabilities, including personal residences and their related mortgages, that are not held as investments and do not produce income. Regardless, some filers did list this information, and when they do, it is included in our totals and detailed listings. On occasion, filers will provide, as required, detailed listings of the assets that underlie a given account for which they also report their combined value. In these cases, the summary figure has been omitted from calculations to avoid doublecounting. Salaries of Congressmen are also not disclosed.

SOURCE: Center for-Responsive

Politics, April 2008

Center for Responsive Politics

p. 5

Story Ideas Using Politicians' PersonalFinancial


How much is my congressman/delegation worth? Compare each member to the others, chart their net worth over multiple years.compare to the average for members or ; constituents in the area you cover. Did they fill out the form correctly and completely? Or did they just attach some financial statements and leave it at that? Did they inadvertently include Personal information such as Social Security Numbers, whichidentityJhieves could prey upon? If so, did they ever sponsor any 'egislation tocombc:ltidentitytheft? . Are th~y smart mon~ymClnagers? Congress controls the federal budget. Are members of Congress good stewards. of their own money? Consult a financial analyst for an expert :.. review of these reports. .. Do they owe any money to someone who might want

• . To whom do they owe money? more than the money in return? • Which industries and companies industry or company?

are they invested

in? Does the official regulate the

Are they invested in local companies and industries? competitors of local companies and industries?

Or invested in out-of-area

Are they invested in companies whose business may be contrary to the politician's stated positions? Are they making money off of activity they say they disagree with? Are their political "valuesJn line with their investments. Who are their partners? Research their fellow investors in real estate partnerships, privately held companies, etc. Are these people campaign contributors? Have they had any legal trouble? Where is their real estate? Can you find any ways in whichtheirrealestate appreciate because of new road projects or other government investment? might

SOURCE: Center for Responsive Politics, April 2008

Center for Responsive Politics

r ".,

p. 6

Personal Finances of C().f'igresslnthe


,-Less than six weeks after chairing a hearing where a Key Energy Services executive testified, Rep. Steve Pearce (R-NM) sold his oil services company to Key Energy for more than double it's previously reported worth. - . 'An October2007 Roll (Jail analysis of public real estate records showed that Rep . .Patrick McHenry (R-NC),an advocate of revoking the personal residences exemption, . owned at least three properties worth: more than $300,000 that were not disclosed on his personal financial disclosure. . President Barack Obama faced questions about his personal finances as a U.S. senator froITlllllnois after the New York Times highlighted investments he made in companies conn€)cted to his campaign contributors that stood to gain from governmentqecisions\and Contracts. Obama.says theygotno ispecialtreatment--hedidn'teven know he owned stock in them. Obama,a Democrat, >saidh.isinvestmentadviser bought the stocks for-him in 2005 while he w,ss in the process Of setting upa "blind"JrustJo avoid conflicts of interest. For several years Sens. Hillary' Clinton (D-NY), Bill Frist(R-TN) others failed to list positions they held with their family foundations on their financial disclosure forms. The omissions were discovered through investigation of the IRS filings of the foundations. These foundations can provide substantial tax benefits to the families that run them. Rep. Rick Renzi (R-AZ) failed to disclose a $200,000 payment he receivedJroma business partner in apparent violation of ethics rules. Renzi now claims that the payment was repayment of a business loan, butthefailure to mention it in his financial disclosure filings has contributed t9 the suspicion of federal law enforcement that it is related to a landdealthat may have benefited from actions Renzi took in Congress. In 2008, Renzi Was indicted on 35 counts including using his position to include land owned by a former business associate (who happened to owe him $800,000) in a federal land deal. He has also been accused of embezzling over $400,000 from the insurance company he founded. A numberofpublic figures.have .found themselves in the spotlight for holding certain . investments that conflict with their policy positions. Ex--sen ..GeorgeAlien (R.vA) , despite being an.abortion foe, owned stock in the maker of Plan B, the so-called morning-after.pill. Cindy McCain, wife of former presidential candidateand Sen. John McCain (R) who has publicly called for more aggressive action in Sudan due to the Darfur crisis, divested of holdings in mutual funds that did in fact invest in companies that continue to operate in Sudan. Reps. Steve Rothman (D-NJ) and AIYson Schwartz (D-PA) divested of similar Sudan related holdings in responsetoGRP research of Congress' personal financial disclosures. Presidential candidate Bill Richardson (D) divested of Valero Energy stock and options that he received for sitting on their-board because of the conflict with his "green" image.






Center for"'~ Responsive Politics



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